OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS

Credit Tracker By Industry Sector

Credit Tracker By Sector

Credit ratings are not currently available for public cannabis companies leaving companies, lenders and investors with a gap of information. The Viridian Cannabis Credit Tracker fills this gap. The model uses 11 market and financial statement variables to discern 4 key credit factors: Liquidity, Leverage, Profitability, and Size, to provide credit/liquidity analysis for over 370 public Cannabis/Hemp companies.

Week ended 01/05/2024

Hemp is another sector that demonstrates the weakness of standard credit metrics. The sector’s median current ratio is pretty weak at 1.05x, but our bespoke free cash flow adjusted current ratio at a median of .12x tells the true story of the sector’s liquidity. More than half of the 49 companies measured have critical levels of liquidity and will need to obtain more financing within a short period. Our custom leverage indicator, total liabilities to market cap, tells another credit story about the sector. With a median of 1.45x, the ratio is reasonable and better than the cultivation and retail norms. However, negative funds from operations for more than half of the companies indicate leverage will likely worsen, assuming the companies can find willing lenders.

Week ended 01/05/2024

Hemp is another sector that demonstrates the weakness of standard credit metrics. The sector’s median current ratio is pretty weak at 1.05x, but our bespoke free cash flow adjusted current ratio at a median of .12x tells the true story of the sector’s liquidity. More than half of the 49 companies measured have critical levels of liquidity and will need to obtain more financing within a short period. Our custom leverage indicator, total liabilities to market cap, tells another credit story about the sector. With a median of 1.45x, the ratio is reasonable and better than the cultivation and retail norms. However, negative funds from operations for more than half of the companies indicate leverage will likely worsen, assuming the companies can find willing lenders.

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